Our Greatest Challenges in the life of a small business owner/manager
With the financial year end looming, it is an opportune time to reflect on our businesses. The life of a small business owner/manager is very challenging. It is very easy to keep doing things the same way as before. However, for long term survival it is important to sit back from time to time and reassess what we have achieved and where we are headed.
We find it worthwhile to think about what will be our greatest challenges over the next 12-24 months. Here are a few ideas/questions to consider:
Sales are often the key driver of your business. Some of the challenges for small businesses are:
- How do we grow our sales?
- What should we be aiming to sell?
- How do we improve the gross profit on each sale?
- Where are our customers going to come from?
- How can we convince customers to buy from us instead of our competitors?
- How much do we have to sell to make a profit?
- How much stock should we hold and what type?
- What is our optimum price where we make the sale but also make an adequate profit?
- What is our perceived selling difference?
- Is our market disappearing?
Whether your business is just you or whether it employs many, the people in your business raise their own set of challenges:
- Have we got the right number of staff?
- Have we got the appropriate skills to serve our customers and run the business?
- How can we attract and retain key people and move on the ones that we don’t want?
- Are our wages competitive?
- Are we paying above the market? Is our wages bill too high?
- How will we keep everyone motivated?
- Are there any Work Health & Safety risks that aren’t being managed?
- How strong is our cashflow, can we pay our bills on time now and in the future?
- Do we need to review our banking arrangements, are we getting the best deal?
- Are our loans set up the best way for our cashflow and profitability?
- How can we collect our accounts receivables quicker?
- Can we negotiate better deals with our suppliers?
- Are our insurances up-to-date and do we have appropriate cover?
- Do we make it easy for customers to pay us?
- Are we, as owners, earning an adequate profit to justify the amount of money we have invested in the business?
- Are we building wealth?
- Do we have the right equipment?
- When will we need to update equipment and what will it cost?
- Is our location still right or should we be moving to another site?
- Are our processes efficient or could we be doing things better?
- What changes are on the horizon? Are we set up to take advantage of new opportunities?
Obviously, it’s difficult to address all of these issues and still put out the daily spot fires. Nevertheless, by reflecting on these things, priorities will emerge and changes will happen gradually, helping to secure the longevity of your business.
At Potts & Schnelle we are passionate about small business. If you would like to talk to us about any of these issues, please give us a call – 02 6033 2233.